FATF Meeting: Will Pakistan Dodge Grey List this time?

A key virtual meeting of the Financial Action Task Force (FATF), an international organization working to combat money laundering and terrorist financing, began in Paris on Monday.

The five-day meeting will review Pakistan’s performance against money laundering and terrorist financing and decide whether to remove it from the grey list.

As always, Pakistani officials are hopeful that the meeting could decide to remove Pakistan from the grey list, given the country’s performance.

One reason for this optimism is the announcement earlier this month by the Asia-Pacific Group, a subsidiary of the FATF, to upgrade Pakistan’s rating, with Federal Minister for Energy and Pakistan’s caretaker Minister for FATF, Hamad Azhar said it was the result of sweeping legal reforms in 14 federal and three provincial laws.

According to the Asia-Pacific Group Mutual Evaluation Review report released on June 2, “Pakistan has achieved this rating by implementing 31 of the 40 technical recommendations of the FATF.”

Will Pakistan dodge the grey list?

A member of the team representing Pakistan in the FATF said that by February this year, Pakistan had implemented 24 of the 27 points of the FATF Action Plan. After which, further progress was made and according to the latest review, Pakistan has acted on 26 out of 27 points after which a decision of FATF is expected on June 25.

However, he said that despite the implementation of 31 out of 40 recommendations of the APG, Pakistan still has to overcome many minor technical shortcomings in terms of money laundering.

Similarly, much remains to be done at the technical and implementation levels regarding the FATF’s 27 points of terrorist financing, which could naturally take a year or a year and a half. “That’s why it may take longer to get out of the FATF’s grey list.”

He said that Pakistan had started from scratch and now more than 80 per cent of work has been done and any country needs time for such progress.

When asked during a press conference on Monday, Federal Minister Hamad Azhar replied that there were two simultaneous reviews of Pakistan to get out of the FATF’s grey list, one of which was the Asia Pacific. The group’s review shows that Pakistan has made progress on 31 out of 40 points and the second is the FATF’s action plan.

The Federal Minister said that the final decision would be taken keeping in view both the assessments.

Decisions will be announced at a press conference after the June 25 meeting, according to the FATF website.

Pakistan’s progress so far

Pakistani officials claim that Pakistan has implemented 26 of the 27 points of the action plan, on the basis of which Pakistan hopes to get out of the grey list.
The FATF meeting in February this year gave Pakistan until June to get out of the grey list.

Addressing a press conference at the time, FATF President Dr Marcus Pleyer had said, “Pakistan has assured the FATF to implement the action plan at the highest level. Pakistan is not on the blacklist at this time.”

He said that Pakistan has implemented 24 out of 27 points. FATF President Dr Marcus Pleyer had said that Pakistan has made good progress in implementing the Action Plan but some serious shortcomings still remain. These shortcomings are related to the financing of terrorism. Pakistan needs to improve its investigations and prosecution of terrorist financing groups, organizations and individuals.

He had said that “as soon as Pakistan implements the remaining points, then we will see how sustainable Pakistan’s implementation is.”

The FATF had in June 2018 put Pakistan on a grey list for failing to take effective measures to curb terrorism and money laundering and proposed a 27-point strategy for it. May be out of the grey list.